The US minted gold coins until the 1930’s (and then a long gap). The denominations were: $2.50 (quarter eagle), $5 (half eagle), $10 (eagle), and $20 (double eagle). Would they have been used in daily transactions, or were they more used as gifts (my mother had a $5 gold coin commemorating her year of birth (1914))?. Did some people still not trust paper money? The average annual mintage numbers for each denomination (1907-33) was close to a million.
No way would these have been used in daily transactions. These were collectors’ items and, while you could buy stuff with them at their face value, that was not their purpose. The vast majority of US currency was not made from precious metals. Why use a $10 gold coin to buy something when you could use a piece of paper with $10 written on it for the same purpose?
I am not a coin collector but given the value of gold today I’d be interested if their value was now greater than their face value (which they also may be higher as a collector’s item).
Your first sentence is mostly true, but not the second. They generally weren’t used in daily transactions. But they weren’t meant as collectors’ items either. The were made of specie, that is, an alloy of gold and some other metal, as opposed to bullion which is pure gold. Spece is meant to be used in transactions; bullion is meant to be collected or an investment.
The reason they weren’t used in daily transactions is that they were usually hoarded. Gresham’s Law applies. Gold coins were seen as more valuable even though they had the same nominal value as an equivalent note. So everyone spends the notes and hoards the coins.
They’re all worth far more than their face value. Even if they’re so worn that they’ve lost their collector’s value, the gold is worth far more than the nominal value.
Totally false, the $5 gold coin was the size of a nickel,and the $5 bill was quite large. Silver dollars were everyday use and so were the $5 gold coins. In fact they made a special wallet just to store either gold sovereigns (In GB) or the $5 “ned” aka half-eagle. Both of those coins, along with similar 1/4 oz nickel sized coins were commonly minted and used throughout Europe and America. Used in daily transactions. In most years they minted hundreds of thousands of these, in 1882 they made 2,514,520.
$5 Liberty Gold Half Eagles - Buy US Gold Coins.
Half Eagles – America’s first gold coins
Half Eagles were the very first gold coins minted by the United States. Authorized by the Coinage Act of April 2, 1792, they went into production in 1795 and continued almost without interruption until 1929, making them the longest-lasting of all US gold coin types.
With a denomination of $5, Half Eagles contain nearly a quarter-ounce of pure gold. Their smaller size allowed them to be used in almost every aspect of American economic life, from daily commerce in stores and saloons to large banking transactions and international trade. Among affluent families in the late 19th Century, they even became traditional stocking-stuffers for fortunate children at Christmas!
Out west where gold was more common, prices were higher etc, they even saw a need for a $50 gold piece, but the $20 Double eagle wasnt commonly used for everyday transactions like Westerns would have you believe (They were more for banks). The $10 eagle was fairly commonly used, but not so much as the $5.
The “double eagles” weren’t used in transactions a lot, because $20 was a lot of money back when they were around. They were used for international trade when foreign banks did not want to accept foreign paper money. Gold kept its value-- foreign paper money did not always.
The smaller denominations did get used in transactions, though. In fact, there were times when there were paper shortages, when gold coins were easier to get hold of.
The $2.50 & $5 were pretty commonly used-- enough that there are lots of counterfeit ones around, and there was also an issue once when 5-cent nickel was made with a big Roman numeral V on it, but not the words “CENTS.” People gold-plated them, and passed them off as a new gold $5 coin. The government wised up and added the word CENTS the next year, and to the rest of the issue of the nickel.
When I was young (1950s) by dad had a few small gold coins in an envelope. Very tiny, probably the $2.50. He said they were all from circulation.
More on the “gold-plated 1883 nickels”:
The Story Behind The 1883 No “CENTS” Liberty Nickel
And, another link to a story about small gold coins:
https://www.pcgs.com/coinfacts/category/california-fractional-gold-1852-1882/1659
In 1933, it became illegal (in most cases) to hold any gold (Executive Order 6102). Did safety deposit boxes suddenly fill up with gold coins, or did most people obey the law and convert them to paper money? Would they have been afraid of their boxes being searched (which never happened), and thus liable to a $10k fine? The coins would have been worthless (in the US) until about 1971 - would some hold them that long?
They were never worthless. You were allowed a modest amount, and exceptions were made for collections, jewelry, etc.
After the gold in the coins became worth more than the face value, quite a few were melted down.
In the 40s and 50s, there were of course no gold coins in circulating. Silver dimes and quarters and less commonly half dollars circulated freely, but I don’t ever recall getting a silver dollar in circulation. Maybe they were commoner in the west. Oh, now I recall there was a gay 90s ice cream bar on the outskirts of Wilmington that gave silver dollars in change.
My mother once lost a $5 gold piece and was mortified. It was worth more than $100 bill today.
That may have been true some of the time, but ISTM that a bigger reason was simply that $2.50 or $5.00 wasn’t “everyday purchase” money. It was way more than you typically needed for a haircut or lunch, for example.
People generally favored paper currency but somewhat less so in the western part of the country. My dad remembered his dad showing him gold coins with which some of his patients had paid his fees, in SLC in the late 1920s.
As far as hoarding is concerned, there were also times early in American history when silver was overpriced relative to gold and was hoarded, leading to critical shortages of silver money. At various times, these shortages were addressed either by printing fractional paper currency, or–believe it or not–minting tiny gold coins worth a quarter or half dollar.
Before the silver price “hockey stick” rise of the early 1960s, or so I’ve heard, silver dollars were an expected part of the Vegas experience and frequently brought home as souvenirs. But they were just novelties as it were, and not worth any more or less than any other kind of dollar.
There was a TV show once where the desperadoes suddenly get time-travelled into the present day. (i.e. 1970’s). THey go find their stash of $20 gold coins and ask someone if they are still worth anything… hilarious laughter in response.
Presumably they were supposed to be the proceeds of a bank robbery.
Was that the Twilight Zone episode where the gold bars were worthless because in the future they figured out how to make gold?
No, I think it was some very short-lived series or a TV movie which made hay about the old-timers adjusting to modern ways. “Bonanza meets Encino Man” would be the pitch line.
My mother worked as a store clerk in the 1960s. She occassionally got silver dollars from customers. She would set these aside and replace them with her own $1 bills. She had a large vase at home she would put them in. When the family went on vacation in Nevada she used those as gambling money. (It was a psychological thing apparently since she spent them at face value. Encouraged setting aside money for a vacation thing I guess.)
She collected a couple hundred each year.
Once, she gave me one of them. I still have it.
As a note on Vegas & silver dollars, making change by turning in a larger denomination chip for $1 chips is still called “asking for silver” and you would say something like “can I get silver?” while giving the chip. I don’t know how widespread it is anymore, but I’ve never had a dealer not know what I meant.
This is one where you definitely need to define the exact time you’re talking about to get an accurate answer. The heyday of the classical gold standard was the pre-WW1 time between the 1870s and 1914. In those days, gold and paper currency backed by gold were freely convertible into each other, and a note-issuing bank would exchange its own note for coin at any time no questions asked. When WW1 broke out, governments suspended gold convertibility, and attempts to restore it after the war were unsuccessful or short-lived. This culminated in the ban of private possession of gold in 1933, following which the gold cover of the dollar was only nominal domestically (although it still existed in relation to foreign central banks). I would say that usage of gold coins as currency would not have been unusual pre-1914 but very much unusual after WW1.
There was a Twilight Zone episode with THAT plot:
That’s why I started my post